If you’ve never leased Commercial Real Estate before it can be a bit of a surprise when you see the different standards in the industry compared to how Residential Real Estate generally runs.

The timeline for leasing differs, the break down of expenses varies and the responsibilities that come with leasing CRE can be a little stricter.

Here are the 5 things to keep in mind before leasing Commercial Real Estate.

1.) Your Credit Score Will Be Checked.
The first thing that you should be prepared for is a credit check. Almost any Real Estate company is going to look into your credit score to see the order of your finances. If you have a poor credit score don’t get discouraged – it’s not the end of the line in Commercial Real Estate. If your credit score is below a >700 you’ll likely have a bigger security deposit or required to have a longer lease but if you take good care of your suite you’ll get your security deposit back at the end of your term.

2.) You’ll likely have a longer lease. 
Unlike residential leasing – where you can have a 6 month or year long lease – in Commercial Real Estate it’s very rare to have a short term lease or anything under two years. You should expect to sign a lease anywhere from 2-5 years depending on market conditions and the type of space you’re leasing into.

3.) You Are Responsible for Inside Maintenance.
With Residential Real Estate you’re generally not held liable if something in your suite breaks; if your HVAC goes out or your dishwasher breaks normally you’re covered under the terms of your lease. In CRE this differs. Generally in CRE your HVAC is covered for the 1st year or guaranteed in working condition with the signing of your lease. This is also how the inside of your suite works; it is guaranteed in working order on the signing of the lease, and from there on out it is your responsibility.

4.) There’s Definitely CAM.
With Residential Real Estate you aren’t always going to have a HOA fee or any sort of maintenance. With CRE it’s almost guaranteed that their will be a CAM fee for your unit. If you’re unsure of what CAM fee’s are see the article we have written about it here.

5.) You’ll Need Liability Insurance
With CRE you’ll need to have very specific liability insurance (outlined in your lease) and it’s not something to mess around with. The company that collects your rent with need a current copy of your insurance with the Landlord additionally insured. Make sure you have liability insurance, and that you’ve calculated this extra cost into your budget.


See anything we’ve left out? Leave a comment below with what YOU think people should know before leasing CRE!

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Posted by: Phyllis on September 10, 2018
Posted in: Uncategorized